BMO InvestorLine adviceDirect. Co-pilot for the Self-Directed Investor.

As I had outlined in my review of BMO SmartFolio BMO Wealth offers a full suite of online offerings.

• Auto Pilot – SmartFolio
• Co Pilot – BMO InvestorLine adviceDirect
• Fly Solo – BMO InvestorLine Self-Directed

Today we’ll look at BMO InvestorLine adviceDirect the Co Pilot option that is designed for self-directed investors who want some assistance in creating that portfolio (take off) of stocks, bonds, mutual funds and/or ETFs and also seek some guidance to help them stay on track. If I could exhaust my limit on the flight analogy adviceDirect is there to help Do-It-Yourself investors navigate that investment journey.

You might think of it as the control tower that’s keeping an eye on things from a higher level down to knowing what’s happening on the ground.

The view from the sky or higher level would refer to your asset allocation and goals that you have outlined in your personal profile that will also gauge your investment goals and risk tolerance level.

On the ground, adviceDirect will keep a digital eye on all of your holdings. The platform will also be looking out for pitfalls and then opportunities that will help you (potentially) better reach your goals.

Here are the 4 quadrants that are under continuous evaluation and monitoring.

In this example, you’ll notice that Risk and Diversification are ‘in the green’ while Asset Allocation and Rating are ‘in the red’. As you can likely guess the control tower has detected that you’ve drifted off your path, the asset allocation has moved outside of your prescribed boundaries and you might need to (or decide to) take action. The Rating quadrant is also red as one or more of the asset holdings are rated as “sells”.

This could be because the holding is now of poor quality or carries unnecessary risks.
At the core think of this as identifying problems and offering solutions. The goal is to keep you flashing green in every quadrant. If we want to turn to a Canadian hockey analogy, adviceDirect will take your portfolio that is offside and get it onside.

Quite simply adviceDirect is a 3-step process.

Review.   Plan.   Execute. 

Keep in mind that the Plan that is created and offered to you is in ‘digital pencil’. You can modify the plan. You have the final say before you execute. adviceDirect is doing the leg work for you in organizing your research opportunities and offering up ideas to consider.

The individual stock analysis and fund ratings is provided by MarketGrader. This is a proprietary analysis system that looks at 24 company fundamentals to determine the company’s value, prospects, financial health and overall ranking. You will then be directed to research reports.

Exchange Traded Funds and mutual funds will receive a rating from Morningstar. With funds you can sort by rating, fees, yield and fund type.

In the above scenario where two quadrants are in the red you would receive separate email notifications with respect to the asset allocation that needs attention and to the asset rating warnings. When you log into your account you will see a top line view of your total holdings by asset allocation (stocks to bonds to cash) and a breakdown of your sector allocation (energy/consumer staples/health care etc). You will also see all of your individual asset ratings from 0-100; those ratings are updated daily for your stocks. MarketGrader covers 6100 Canadian and US companies. Fund ratings are updated monthly.

Here’s an example of the overview report that you would see when you receive a notification on a company that MarketGrader sees as poor quality. There are multiple assessments for Growth, Value, Profitability and Cash Flow. You are then offered a synopsis and rationale for the ratings of each Fundamental Quadrant.

You will then be offered buy recommendations based on your investor profile type. The advice is tuned to your profile and goals. The Plan is designed to bring your overall asset allocation (risk level) and diversification in check. adviceDirect can measure or take into account any individual stocks by sector in concert with the sector allocation within any funds that you hold.

When offered Plan alternatives you can filter the stocks by sector, market (US or Canada) and yield. Of course you will also see that rating from 1-100. Your stock suggestions will certainly be in the higher rating range of 60 and above.

For fixed income there is a very broad offering that includes individual corporate bonds, T-Bills, ETFs, Mutual Funds, and GICs available from many Canadian financial institutions. The bonds are rated by Standard and Poor’s. Once again you can sort your fixed income offerings by many different categories and criteria including the fees they charge.

Once again, it’s your plan, but you are being offered advice and direction. With respect to a sell recommendation you will be offered the mostly highly rated alternatives in the sector or sub sector. For your personal holdings you can always access multiple research reports on your personal page, from BMO Capital Markets, Canaccord Genuity, RBC Capital, TD Securities, Scotia Capital and more.

You can request reports on any company that is covered. Those will be sent to you via email.

Here is an example of that MarketGrader sell recommendation. You will then see the higher-grade considerations, starting with the top 10. You are in control of the final selections.

As you add your new stock selections and amounts you will be able to see (in real time) if your tailored plan will move you into the green with respect to the four topline quadrants of asset allocation, risk, rating and diversification.

Executing your plan. 

You will see a multiple order screen with multiple tickets for all of your equity buy and sell orders and all of your fixed income buy and sell orders. You also have complete control of buying at market price, or putting in a limit order where you select the price at which you would like to buy or sell. You can sell full or partial positions.

When you press Execute all of your buy and sell requests will be sent.
For a full demonstration please watch this video hosted by Jason, an adviceDirect advisor.

And of course, speaking of Jason and investment specialists, there is that helping hand available when you need it.

What are the fees? 

There is also a promotional offer available; you can receive up $1000 cash back when you open an account up until and use promo code ADCTC.  Click on this link for promo details.

You can set up personal registered and joint accounts for non registered plans. There are also accounts for corporations, sole proprietorships, investment clubs, societies or churches, trusts or estates.

Robust Research.

adviceDirect is a very robust offering that can help investors in two main areas. It can help you stay on track with respect to your goals and risk tolerance level. adviceDirect can identify asset risks and instantly do the extensive leg work to offer high-quality companies and funds for consideration.

Cut The Crap Investing readers can sign up through this partnership link.

Thanks for reading. While I do not accept monies for feature blogs please click here for more about Dale and ‘how I might get paid’ disclosures. Investing is always very personal and based on each investor’s profile and goals; the examples in this post are not to be taken as investment advice on behalf of BMO or Cut The Crap Investing.